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    HKMA Sets CCyB, Issues Report on Artificial Intelligence and Big Data

    October 28, 2021

    The Hong Kong Monetary Authority (HKMA) announced that the countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1.0%. HKMA also announced the publication of a report that offers a regional perspective on artificial intelligence and big data in the financial services industry. The report was released by the Hong Kong Institute for Monetary and Financial Research (HKIMR), which is the research arm of the Hong Kong Academy of Finance (AoF). Among other factors, the report presents and discusses the results of an HKIMR survey that gathered market participants’ views on the status, benefits, challenges, and risks of artificial intelligence/big data adoption as well as on the demand for talent.

    The report discusses the adoption of artificial intelligence and big data in six major financial centers in the Asia Pacific (Hong Kong, Shanghai, Shenzhen, Singapore, Sydney, and Tokyo) across four main financial services sectors (asset management, banking, insurance, and securities trading). The report describes the recent transformation of the financial services industry using artificial intelligence and big data technologies and highlights the role of talent integrating these new technologies into the financial services industry’s core business functions. It explores market participants’ views on artificial intelligence/big data adoption and the demand for talent in major Asia-Pacific financial centers in a survey commissioned by the HKIMR. The following are the key findings of the survey:

    • ~71% of firms across sectors of the financial services industry in the region have either adopted or planned to adopt artificial intelligence/bigdata technologies in the next 12 months.
    • Financial institutions in Hong Kong, and Asia Pacific, that have adopted artificial intelligence/big data technologies gained insights leading to better products and services as well as made better decisions thanks to enhanced modeling and automated repetitive activities to enable staff to use their time more productively.
    • Market participants highlighted that  artificial intelligence/big data adoption adoption has brought them various benefits, but they were also concerned about talent shortages, data issues, business-technology integration and adoption costs. The participants indicated that the aforementioned challenges are likely to persist over the next five years.
    • Market participants identify clear benefits from artificial intelligence/bigdata adoption, but they also highlight that the shortage of talent is one of the key challenges now and in the next five years.

    The report also presents the views of market participants on promoting talent development and reviews the relevant initiatives implemented internationally and in Hong Kong. The report concludes with suggestions aimed to enrich Hong Kong’s pool of talent, including strategies to narrow the existing talent gap, support talent recruitment, and foster talent development. 


    Keywords: Asia Pacific, Hong Kong, Banking, Artificial Intelligence, Big Data, CCyB, Regulatory Capital, Fintech, Basel, Regtech, Credit Risk, HKMA

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